Ergomed has announced the acquisition of MS Clinical Services, a specialized clinical research organization (CRO) based in Houston, Texas.
“We are delighted to have delivered on our strategic goals in 2020 with the expansion of our US footprint in both the CRO and PV businesses. The addition of MedSource and its complementary expertise in oncology and rare disease will further establish Ergomed as a specialized services provider in the strategically important US market, building on the successful acquisition and integration of Ashfield Pharmacovigilance (now PrimeVigilance USA) earlier this year,” Dr. Miroslav Reljanović, Executive Chairman of Ergomed, said. “We look forward to developing the potential of this new business to offer truly global clinical research services to our international customer base. We are excited to welcome the MedSource team to Ergomed and are eager to work alongside our new colleagues to leverage our combined expertise in complex therapeutic areas for the benefit of our clients and patients worldwide. Looking ahead to 2021 we expect to see continued momentum across the business as we look to increase our footprint in key geographies, and firmly establish Ergomed as a leading global provider of specialist services to the pharmaceutical industry.”
“I am delighted to be joining the Ergomed Group and continuing my current role. We are confident that this is an important strategic step and natural fit for MedSource, as Ergomed is an exciting, fast-growing global company with a strong reputation in the CRO industry. Our own extensive experience in oncology and rare disease drug development and across product types, clinical trial phases and study designs will complement the services already offered to Ergomed’s international client base. The combined business will be of great benefit to our US clients and employees, providing a seamless service offering into Europe and globally,” Eric Lund, founder of MedSource, who will continue in his current role as President of MedSource after the acquisition, said.
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MedSource is a full-service CRO with a focus on complex diseases and study designs.
The two businesses have core expertise in complex disease areas. The combined business will enable an even greater degree of specialist expertise in high growth sectors of the overall pharmaceutical services market in which Ergomed specializes.
Under the terms of the equity purchase agreement (EPA), Ergomed has acquired MedSource for an initial consideration comprising $16.2 million in cash paid at the closing of the transaction, up to $1.8 million in Ergomed shares to be issued at a price based on the average daily closing price for 30 days preceding the acquisition and within 15 months of the closing of the transaction, subject to reduction for breaches of representations and warranties, and up to a further $7.0 million payable 90% in cash and 10% in shares depending on MedSource’s financial results in the year to 31 December 2021. The EPA includes customary provisions relating to normalized working capital and representations, warranties and indemnities.
The acquisition will be funded using the Company’s existing cash resources without significant depletion of cash available to fund future organic and inorganic growth.